Omeros Pursuing Legal Action Against Short Seller for Report That Caused Stock to Tank This Week
June 29, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Recently, someone calling himself or themselves “Art Doyle, posted a blog online titled “Fraud, Lies & Hidden Delivery Problems” about Seattle-based Omeros Corporation . “Art Doyle” appears to be a pseudonym, and on Seeking Alpha describes himself as having “Expertise in immune oncology, statistics and James Beard award winning restaurants. What Wall Street wants and what is fact are parallel paths. I can drive on both sides of the road.”
Omeros released a statement today, saying, “’Art Doyle’ self-identifies as having a short position in Omeros’ stock. While the company does not routinely respond to defamatory statements, given this report’s egregious nature, the company elected to respond. This report is replete with falsehoods, misleading statements and incorrect analyses and conclusions. ‘Art Doyle’ states that it stands to profit in the event that Omeros’ share price declines. The report is actionable and the company is pursuing legal remedies. Omeros intends to hold all responsible parties accountable.”
It appears that “Art Doyle’s” post caused a 20 percent drop in Omeros price, although it has bounced back by about 4 percent. Shares are currently trading for $20.48.
Writing yesterday for The Motley Fool, Maxx Chatsko looked at the stock, apparently prior to the “Art Doyle” report. He noted, “Omeros Corporation stock hit all-time highs earlier this month after announcing that the U.S. Food and Drug Administration had granted OMS721 the coveted Breakthrough Therapy Designation for treating Immunoglobulin A (IgA) nephropathy, a rare kidney disease. The drug candidate’s Phase II data demonstrated an impressive ability to reduce protein levels in the blood and kidneys, a hallmark of IgA nephropathy with debilitating health effects, for which there are no approved treatments available.”
That would be reason enough for investors to be excited. Approximately 10 to 20 percent of all dialysis patients in the U.S. have the disease, or about 120,000 people.
The drug is also expected to start a second Phase III trial later this year for a rare immune disease, atypical hemolytic uremic syndrome, and is presently in a Phase II trial for a rare disease that affects blood vessels in vital organs, hematopoietic stem cell transplant-associated thrombotic microangiopathy.
Chatsko concluded, “Volatility is often the name of the game when it comes to small cap biopharma stocks. Wednesday’s slide shouldn’t cause investors to panic nor feel any differently about the company’s prospects than they did a few weeks ago. What really matters for Omeros Corporation is the long-term performance of its budding drug pipeline.”
Meanwhile, Omeros is putting a lot of energy into expanding sales of Omidria, which is utilized in cataract surgery, as well as pushing OMS721 into and through a Phase III trial.
Currently there is no approved treatment for IgA nephropathy, the most common primary glomerulopathy worldwide.
When the FDA granted OMS721 breakthrough therapy designation on June 13, the company’s chief executive officer, Gregory Demopulos, said in a statement, “We are pleased that FDA has granted breakthrough designation to OMS721 for IgA nephropathy and appreciate the Agency’s recognition of the potential importance of OMS721 in the treatment of this disease. OMS721 appears to be helping IgA nephropathy patients with a rapidity and magnitude not previously seen with any other therapy, and we look forward to working closely with the FDA to accelerate its development.”